Wednesday, July 4, 2012

The Power of Taxing Authority

Not a great position to be in, use a product that doesn't exist or the government will fine you. Healthcare is about to experience a similar problem, offer affordable health insurance or they will fine you.
Community rating and guarantee issue coupled with all the new benefits like "free" preventive care and unlimited lifetime maximums it is easy to see premiums reaching these points. The real kick in the teeth is having your hands tied behind your back to prevent from reaching this point. Historically employers could control cost the following ways;
  1. Charge employees more to be on the plan. No longer an option, if you exceed the employees' affordable percent of income you pay a penalty.
  2. Increase deductibles or co-pays; passing more out of pocket cost onto the employees. Government has set low OOP limits that can not be exceeded.
  3. Cap annual or lifetime spending. No longer allowed.  
How is a plan to stay under the $10,000 limit if all management of the plan has been taken away from them? We see the government clearly has no problem penalizing business for failing to do the impossible. It's almost like they don't want businesses offering insurance.....

The only solution I have come up with is to unilaterally pay providers less, not sure if this will comply with the OOP regulations but plans might need to go to a scheduled reimbursement. They will pay X regardless of what the hospital is willing to accept and the member is liable for either finding a provider that will accept it or paying the difference.

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